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TFA ignores that the economic question of whether AIs will take every job depends not only on whether they are capable of doing them, but also the cost of doing

TFA ignores that the economic question of whether AIs will take every job depends not only on whether they are capable of doing them, but also the cost of doing them. If it's cheaper to hire an old-fashioned human to do job X, humans will keep those jobs. And although tokens are cheap now, remember that right now all the frontier AI companies are flooding the market with tokens well below cost to build a user base; they absolutely need to raise prices eventually to recoup their investors' money, the only question is when and by how much. What if AI remains cheaper than human labour across the board, regardless of token price increases? Well, why not tax tokens? It's a win-win: The government gets flexible control over which jobs remain economic for humans to do and is able introduce changes much more slowly and safely, while it's much more palatable than a hard ban for companies who currently get a big benefit out of AI. Yes, this would mean additional government bureaucracy -- but it's far from impossible. Every country in the world already has a comparable functioning bureaucracy: their ordinary income tax system. What if some countries opt not to introduce such a tax, in a bid to get ahead? This is a problem if there are many such countries, or even a few large ones -- but if the majority of world economies can see the sense in this tax, leaving only a handful of small "AI tax havens", I think the world economy will survive. And agreeing on some level of tax seems much more realistic than trying to get a global agreement on banning AI outright. When I suggested this approach in another comment recently, it was downvoted but there were no comments. I hope anyone who sees an issue with it will expand on their reasons in a reply.

theahura 18d ago
I have some friends adjacent to gov who are actually looking into a token tax on the premise that we tax income / labor. I think it's a great idea. That said, I think if you fast forward 20 years, it is fairly likely that cost per token is going to be on the floor
squinteyedrogue 18d ago
I have an issue with this. But the important issue is not with the idea of taxing AI. My issue is that taxing AI is too narrow. I have a problem with un-checked capitalism. I'd like to see that addressed. I don't think it's very useful to determine how to tax AI right now. But for sake of the discussion let's say that there is a fine way to tax AI (and it might be taxing tokens). Given that we have a fine way to tax AI. And a company that is using AI pays their fair share of AI tax. And the collected tax is fairly distributed to humans to benefit humanity. This is all great. But why do the companies that don't use AI get to escape a similar tax? These companies are exploiting labour arbitrage too. It's just human labour being exploited, not AI. And the AI labour arbitrage is being taxed. I think the human labour arbitrage should be similarly taxed. I have a hunch that this unfair exploitation of human labour arbitrage is the source of much income inequality today. Before AI, and now, we have this problem: Many companies making profits do not fairly share profits with employees. The owner class gets an unfair proportion of the profits. (At least, I think we have this problem in many industries and companies). Now with AI, we anticipate having this problem: Many companies making profits do not have any employees (or very few). And the owner class gets an unfair proportion of the profits. I think these are the same problem. And should be addressed by similar tax and/or government regulations. And these taxes and regulations, because they need to be applied broadly, may be best based on financial metrics not AI metrics. [Note: As an example of issues of taxing tokens: Different LLMS use tokens more or less efficiently. Plus, what is a token? Different LLM's likely have a different definition of what a token is. A company could game the system by using an LLM that is very efficient with it's tokens. It could be argued that this could be a "let the market decide" kind of metric, and the most token efficient LLM would win. But who is to say that the most token efficient LLM is the best LLM? This could be a bad incentive to promote. Then there could be a cat and mouse system where government is trying to make the most pragmatic rules for taxing tokens, and corporations are trying to exploit the rules to their best advantage. The cat and mouse system will always exist, but I think with tokens, it feels like a weak premise to base a tax on because a token is hard to directly relate to the economic value the use of an LLM that is consuming and producing tokens provides.]
- akoboldfrying 18d ago
  Thanks for responding. IIUC, you want companies to pay tax. They already do pay tax; are you asking for the tax rate to be increased? Re whether taxing tokens is fair: I agree that a token from LLM 1 isn't necessarily the same value as a token from LLM 2. I don't think this is an insurmountable problem though. Unfortunately it would probably become somewhat convoluted, just like the existing income tax systems if the world are now.
  - squinteyedrogue 18d ago
    > They already do pay tax; are you asking for the tax rate to be increased? Well, in a fairy tale land, only the companies that aren't paying employees fairly would be taxed more. But that sounds complicated. But maybe not much more complicated than taxing AI.

theahura 18d ago

I have some friends adjacent to gov who are actually looking into a token tax on the premise that we tax income / labor. I think it's a great idea. That said, I think if you fast forward 20 years, it is fairly likely that cost per token is going to be on the floor

squinteyedrogue 18d ago

I have an issue with this. But the important issue is not with the idea of taxing AI. My issue is that taxing AI is too narrow. I have a problem with un-checked capitalism. I'd like to see that addressed. I don't think it's very useful to determine how to tax AI right now. But for sake of the discussion let's say that there is a fine way to tax AI (and it might be taxing tokens). Given that we have a fine way to tax AI. And a company that is using AI pays their fair share of AI tax. And the collected tax is fairly distributed to humans to benefit humanity. This is all great. But why do the companies that don't use AI get to escape a similar tax? These companies are exploiting labour arbitrage too. It's just human labour being exploited, not AI. And the AI labour arbitrage is being taxed. I think the human labour arbitrage should be similarly taxed. I have a hunch that this unfair exploitation of human labour arbitrage is the source of much income inequality today. Before AI, and now, we have this problem: Many companies making profits do not fairly share profits with employees. The owner class gets an unfair proportion of the profits. (At least, I think we have this problem in many industries and companies). Now with AI, we anticipate having this problem: Many companies making profits do not have any employees (or very few). And the owner class gets an unfair proportion of the profits. I think these are the same problem. And should be addressed by similar tax and/or government regulations. And these taxes and regulations, because they need to be applied broadly, may be best based on financial metrics not AI metrics. [Note: As an example of issues of taxing tokens: Different LLMS use tokens more or less efficiently. Plus, what is a token? Different LLM's likely have a different definition of what a token is. A company could game the system by using an LLM that is very efficient with it's tokens. It could be argued that this could be a "let the market decide" kind of metric, and the most token efficient LLM would win. But who is to say that the most token efficient LLM is the best LLM? This could be a bad incentive to promote. Then there could be a cat and mouse system where government is trying to make the most pragmatic rules for taxing tokens, and corporations are trying to exploit the rules to their best advantage. The cat and mouse system will always exist, but I think with tokens, it feels like a weak premise to base a tax on because a token is hard to directly relate to the economic value the use of an LLM that is consuming and producing tokens provides.]

akoboldfrying 18d ago
Thanks for responding. IIUC, you want companies to pay tax. They already do pay tax; are you asking for the tax rate to be increased? Re whether taxing tokens is fair: I agree that a token from LLM 1 isn't necessarily the same value as a token from LLM 2. I don't think this is an insurmountable problem though. Unfortunately it would probably become somewhat convoluted, just like the existing income tax systems if the world are now.
- squinteyedrogue 18d ago
  > They already do pay tax; are you asking for the tax rate to be increased? Well, in a fairy tale land, only the companies that aren't paying employees fairly would be taxed more. But that sounds complicated. But maybe not much more complicated than taxing AI.